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Investors Want Walgreen to Move to Europe: FT

Walgreen (WAG) is being pressured by a group of major investors to move its headquarters to Europe in a tax cutting move, according to a report by the Financial Times.

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Frustrated by Walgreens’ refusal to consider a relocation, the group, which includes Goldman Sachs (GS) and hedge funds Jana Partners, Corvex and Och-Ziff, requested a private meeting with the pharmacy’s executive team this weekend, the newspaper said.

They lobbied the Springfield, Ill.-based company to consider a move, saying it could use its $16 billion takeover of Swiss-based Alliance Boots – one of Europe's biggest pharmacies – to move its headquarters to a region with a lower tax base, a strategy known as corporate inversion.

The U.S. has one of the highest corporate tax rates in the world. In a note to clients last month, analysts at UBS (UBS) said Walgreens’ tax rate was expected to be 37.5% compared with Boots’ 20%. An inversion, they said, could increase earnings per share by 75%.